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Casting a Worldwide Net: How Litigation Funders Can Leverage Europe’s New Unified Patent Court

The following article was contributed by Lionel Martin (Partner, August Debouzy), Pierre-Olivier Ally (Counsel, August Debouzy), Ben Quarmby (Partner, MoloLamken LLP) and Jonathan E. Barbee (Counsel, MoloLamken LLP). 

Europe’s Unified Patent Court (UPC) is on the cusp of launch, confirmed for this June 1, 2023.  It has been eagerly anticipated by the patent litigation community across the member states—starting with 17 European countries, but expected to extend rapidly to all of Europe minus Poland, Spain, Croatia, and, most notably, the UK.

The UPC has been long in the making: over ten years have passed since the agreement was first signed.  What is to be expected of this new court, and what opportunities does it present for litigation funders?

Uniformity and Scale.  The principal goal of the UPC is to offer a single, consistent, and coherent court system in Europe for the litigation of patents.  Historically, procedural differences in the member states’ national patent and court systems meant that the timeline of patent litigation could vary wildly from one jurisdiction to the next.  The jurisdictions also differed on substance: infringement, validity, and injunctive relief rulings were not consistently applied across the board.  And the one way in which the national jurisdictions were similar—comparatively low damages models—acted as further disincentive for patent owners looking to enforce their rights.

The UPC promises to overhaul that system entirely.  It is expected to issue speedy judgments on both infringement and validity.  It should set the scene for damages verdicts that are not only more consistent across jurisdictions, but also generally much greater in size—as one would expect for verdicts covering at least 17 member states.  And it promises greater accessibility and uniformity insofar as English will be the preeminent language of infringement proceedings in any matter involving allegations of infringement extending beyond a single member state.

The UPC must now live up to that promise, and there is some uncertainty as to how the system will play out in its early stages.  Will the court be able to keep up the expected pace?   What standards will the court rely on when imposing preliminary injunctions?  How will damages awards be limited or expanded?  How will the appellate process work?  How will early litigants help shape the law and jurisprudence of the UPC?

Those questions and many more will have to be answered in the coming months and years.  But if the UPC delivers on even part of its promised mandate, it may represent an exciting new arena for litigation funders working with patent owners to enforce their rights.  Indeed, there is reason to believe that the court will strive to be patentee-friendly—at least at the outset—in order to attract its “customers”.

Opportunities for Litigation Funding.  Many of the key features of the UPC as currently contemplated, align neatly with the incentives and priorities of litigation funders and patent owners.

  • Broader Geographic Reach. The UPC makes multi-jurisdictional patent campaigns cost-effective and efficient by allowing plaintiffs to target infringement across at least seventeen countries in one court proceeding.  Plaintiffs no longer need to pick and choose the countries in which to enforce their patents.  The reach of the UPC is likely to expand further: the UPC is expected to be integrated into European mutual recognition mechanisms that will allow the UPC’s jurisdiction to extend not only to the EU but also to Switzerland, Norway, and the UK.  While these mutual recognition mechanisms have long existed, national courts have historically been reluctant to rely on them.  The UPC, by contrast, is expected to do so much more regularly.
  • Reduced Transaction Costs. Reliance on a single proceeding across multiple countries will cut down on the costs of litigating in multiple European countries in parallel.  The UPC will therefore dramatically reduce the resources necessary to launch and maintain a multi-jurisdictional campaign in the EU.  The UPC will also cut down on the logistics and transactional costs associated with such campaigns.  A plaintiff, for example, no longer needs to hire three separate teams to enforce patents in, for instance, France, Germany, and Italy, and pay additional fees for those three teams to coordinate to ensure coherence across jurisdictions.
  • Short Time to Trial. UPC proceedings will expedite the pace of patent campaigns.  Some commentators suggest that proceedings will only take 12-15 months from complaint to final ruling—a significant boon for patent owners looking to promptly and efficiently enforce their rights.  If this holds true, and if sustainable, this pace would rival the speed of some of the fastest dockets among U.S. district courts.
  • Efficient Evidence Gathering Procedures. Unlike the U.S., there is no formal discovery in the UPC, which significantly reduces litigation costs and can expedite proceedings.  But the UPC offers several key features that will be of value to patent owners: (i) plaintiffs may move to seize evidence of infringement from a defendant’s premises, and (ii) they may obtain court orders to force defendants to produce documents.
  • Larger Damages Awards. Since UPC judgments will cover more countries and consumers, the potential damages awards should be considerably larger than they would be in a single jurisdiction.  This should help drive up the value of settlements, and put more pressure on defendants to settle earlier.  It also radically tips the scale on the economics of patent litigation funding in the EU.  Suddenly, the EU becomes an attractive venue in-and-of-itself for funders—not just an ancillary venue in support of higher-stakes U.S. litigation.
  • Broad Injunctive Relief. The UPC will allow patent holders to seek injunctive relief across multiple countries in one shot.  This too should help drive bigger and earlier settlements—a boon for funders looking for a rapid return on their investment. 
  • High-Quality Decisions. It is expected that the Court will render first-rate decisions for two principal reasons: (i) it has attracted seasoned IP judges from across Europe, and (ii) the judges consist of a mix of legally and technically qualified judges.  Furthermore, due to the high specialization of the Court, the number of judges will be quite limited (<100), which may help contribute to greater respect for precedent from fellow judges, which in turn leads to greater predictability for litigants.

Will the UPC be able to deliver on all of these fronts?  Only time will tell.  But for a savvy funder looking for an early mover advantage in a relatively underdeveloped market, and with the opportunity to potentially help shape early UPC jurisprudence in ways that will benefit patent owners for years to come, these are exciting times indeed . . . .

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Commercial Regulatory Issues

AALF Chairman: UK Should Avoid Repeating “Australia’s Flirtation with Overbearing Regulation”

By Harry Moran |

With the UK funding industry awaiting the outcome of the Civil Justice Council’s review of third-party litigation funding, most of the commentary about what direction the government should take has come from those professionals practicing inside the UK. However, in an example of transnational solidarity between funding markets, the head of Australia’s industry association has spoken out to encourage the UK government to act to protect its legal funding sector.

In an opinion piece for The Law Society Gazette, John Walker, chairman of the Association of Litigation Funders of Australia (AALF), presents a strong argument that the UK government must avoid following Australia’s past mistake of overregulating the legal funding industry. With the prospect of the CJC’s review soon reaching its conclusion, Walker argues that the government’s “priority must be addressing the uncertainty created by the PACCAR decision”, rather than acceding to the demands of “the powerful, well-resourced and disingenuous minority perspective of the US Chamber of Commerce.”

Walker points to the recent history of legal funding in Australia, where the strength of these critics’ views led to the previous governments introducing strict regulations that created an environment where “access to justice for claimants was denied, corporate wrongdoers were protected, and claims started to dry up.” As Walker explains, the true lesson from Australia was the reversal of these regulations by the new government in 2022, which has seen funding rebound and drive a wave of class actions representing Australians seeking justice once more.

Taking aim at the opponents of the litigation funding industry, Walker highlighted the “myths pedalled” by groups like Civil Fair Justice as being “built on falsehoods that risk clouding reality and choking off access to justice.” Putting the often-repeated claim of funders supporting frivolous claims in the crosshairs, Walker notes “in reality, funders in the UK fund as few as 3% of the cases they're approached about.”

Commercial Legal Innovation

Qanlex Rebrands as Loopa Finance

By Harry Moran |

Litigation funding startups are a common occurrence, especially in recent years. However, the rebranding of an established funder is less common, yet worth keeping an eye on.

In a new blog post, the litigation funder formerly known as Qanlex announced that it is rebranding and will now operate under the name: Loopa Finance. The funder emphasised that it is still “the same team, the same values, and the same focus”, but with a new name that represents  the adoption of a “a clearer, more modern, and more memorable identity.”

The blog post goes on to provide a fuller explanation of the new name: “Loopa refers to our way of working: examining each opportunity with a magnifying glass and creating virtuous loops of funding, access to justice, and efficient conflict resolution.” The announcement also clarifies that the rebranding “does not imply any structural, corporate, or operational modifications.”

Loopa was founded as Qanlex in 2020, offering litigation finance services for cases in Latin America before expanding its funding solutions to commercial claims and arbitrations in continental Europe. As LFJ reported in January of this year, the funder revealed that it was refining its Latin America strategy using new technologies and focusing on specific sectors within individual jurisdictions in the region. Examples of this sector focus include energy cases in Ecuador, real estate development matters in Costa Rica, and oil and energy cases in Colombia. 

More information about Loopa Finance can be found on its website. 

Case Developments Commercial

Echo Law and LLS File Class Action Against Toyota Finance in Australia

By Harry Moran |

Class actions in Australia continue to be viewed as desirable opportunities for litigation funders, with the first half of 2025 already seeing a number of funded claims brought on behalf of consumers wronged by the state or large corporations. 

A joint media release from Echo Law and Litigation Lending Services (LLS) announced that they are pursuing a new class action against Toyota Finance in Australia, this time over the sale of “junk” add-on insurance to consumers. The claim, which has been brought before the Supreme Court of Victoria, alleges that Toyota Finance and insurer Aioi Nissay Dowa Insurance Company Australia (ADICA), engaged in “unjust, unfair, misleading and unconscionable” conduct that breached the Corporations ACT, ASIC Act, and National Consumer Credit Protection Act 2009.

The class action has been filed on behalf of any consumers who took out a car loan with Toyota Finance and were sold a Toyota branded add-on insurance policy between 1 January 2010 and 5 October 2021. The allegedly “junk” insurance policies covered by the class action include Toyota Payment Protection Insurance, Toyota Finance Gap Insurance, and Toyota Extended Warranty Insurance.

Alex Blennerhassett, Principal Lawyer at Echo Law, said that “this class action is about holding Toyota Finance and ADICA to account for knowingly selling junk insurance to everyday Australians, even though these policies offered no value.” In a separate post on LinkedIn, Emma Colantonio, Chief Investment Officer at LLS, said that the class action is “a strong example of litigation funding enabling access to justice and supporting consumers in holding major financial players to account.”

This class action is separate to the Flex Commissions claim which was filed by Echo Law against Toyota Finance in February 2024. That class focuses on allegations that car dealers secretly inflated the interest rate on consumers’ car loans, resulting in additional interest fees. The Supreme Court has ruled that these separate class actions can be managed together, and Ms Blennerhassett said that they expected “there to be a significant number of persons who are group members in both proceedings”. 

LLS is providing funding for both class actions brought against Toyota Finance. More information on both class actions can be found on Echo Law’s website.